Lately I’ve seen a ton of articles giving money advice to people in their 20s. Not Vince Vaughn Swingers “money” advice, I’m talking the actual green pieces of paper in your wallet that will buy you things like hookers and Panera Bread.
I think learning about making money and what to do with it while you’re still relatively young is a great idea, but there’s a problem with most of these articles—they’re not any good. I’ve found that the vast majority of them will tell you to YOLO in your 20s and not be concerned with how much you make or what you’re saving, and that the “life experiences” you go through when you’re young are far more important than your finances.
I can’t tell if they’re pandering to their target audiences or if they actually believe what they’re saying, but I’ve got a question: how the fuck am I supposed to YOLO if I’m broke?
Let’s say that once you turn 23 it’s time to get serious with your life. So if you’re a 21 or 22-year-old reading this, keep on partying by night and watching Netflix on your parents’ couch by day. But once you hit 23, you should have your first full-time job locked down, start to at least look for an apartment of your own, and branch off from your parents financially as far as possible so you can prepare yourself for the rest of your bill-paying life. The whole notion of partying and living life to the fullest in your 20s is fine, and I actually agree with it wholeheartedly, but what these articles don’t tell you is that unless you have rich parents or win the lottery, you’re going to have to work for your $200 bar tabs and your tropical vacations, and this means securing a decent paying job, watching what you spend, and putting money away any time you can so you’ll have something to fall back on other than what’s in your debit account.
The idea that you shouldn’t care about how much money you make in your 20s is downright asinine. Yes, you fucking should care about how much money you make because although it may not seem like it right now, expensive adult things like engagement rings, weddings, houses, and even kids aren’t THAT far in your future. Even if you’re single, being broke stops being cute the second you graduate college. (Respectable) 20-something girls in the real world will choose an average-looking guy with financial stability over a hot broke dude every single time, so unless you want to spend your Saturday nights eating cheap Ramen and fucking your own hand, you should probably put some effort into landing a job that pays well enough for you to go out and buy a girl a couple drinks.
(And girls, this goes for you too. Somewhere in a guy’s 20s, the type of girl he’s attracted to switches from “drunk and consenting” to “offers to pay for dinner.” Being hot will certainly suffice if you’re just looking to get laid, but if you’re looking for a long-term boyfriend and potential husband, we’ll gladly pass on the 10 who’s life is a trainwreck for the 8 who’s got all her shit together.)
So how much should you make in your 20s? As I mentioned, I completely agree that you should spend your 20s doing as much cool shit as you can, because it’s probably the last decade before you have a family and other responsibilities beyond your own life. This should extend to your job too—in your early to mid 20’s, you should pursue whatever it is you went to college for and presumably want to do for the rest of your life.
For me, this was working in sports. I went to school for Sports Management and my first job out of school was with the Mets, which was a dream job for me because it was my favorite team and I got to go to every game for free. I barely sold enough season ticket plans to afford the train ride back home to my parents’ house, but I didn’t give a fuck because I was doing something I wanted to do. Fast forward four years and now I’m in a job that’s not nearly as cool, but where I can afford the train ride back to my own apartment and even eat dinner that night should I choose.
I’m not saying to give up on your dreams once you hit a certain age. All I’m saying is that as you get older, your priorities change. Going to Mets games isn’t as important to me anymore as getting a decent, steady paycheck and saving for my next vacation. My advice to 20-somethings would be to absolutely try to do what you love for at least a few years, and if it doesn’t work out, it might be time to try and do something else, because the real world isn’t going to slow down and wait for you. And if your field of choice happens to be very well paying and you succeed in that field, all the better.
Someone once told me that you should be making double your age, which I think is a pretty good starting point. For all you math majors out there, that means if you’re 25 years old, you should be making roughly $50,000/year (actually it’d be $50 with the way I worded it but don’t be a smartass). If you live in an expensive city like I do, that number should probably be closer to 2.5, so if you’re a 25 year old living in New York City or San Fran or wherever it may be, you should be making roughly $62,500/year. For the record, I’m 26, live in NYC, and I don’t make $65,000, but it’s a nice ratio to aspire. I read an article recently that said 20-somethings should make “enough to scrape by.” That’s literally the worst advice I’ve ever heard, and I had a childhood friend once tell me I should eat yellow snow. Scraping by isn’t cool. You know what’s cool? Living comfortably and treating yourself to nice things and fun nights because you work hard for your money. Prioritizing having a great time over making money is beyond stupid, especially when you can do both.
So now that we’ve established how much money we should be making, the last question is, what do we do with that money? Have a plan and allocate your money in a few different places. Starting right now, put a portion of your paycheck into a personal savings account and a portion into your 401(k) (that may be the most responsible sentence I’ve ever written). If you can’t afford to contribute to either, you’re probably living above your means and need to make some adjustments in other spending areas. Budget out your set expenses every month (rent, utility bills, commute, etc.) and find out exactly how much money you should have left over every month. What you do with that leftover money is up to you. Some people (girls) use their discretionary income to buy nice clothes and shoes, others use that money to take trips. Some people (me) bring it to the blackjack table and try to multiply it but usually just lose it.